$($Expected rate of return using CAPhi$)$

b$.$ Why is the rate you computed the expected rate?

a$.$ The expected rate of return for Intel common stock is $7.($Round to one decimal place.$)$

b$.$ Why is the rate you computed the expected rate?

The rate is fair and expected because the CAPM provides a theory of how risk and expected return are connected or traded off in the capital markets.

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